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A watched question with a line drawn in advance

The threshold was written before the observation existed. That is what stops a state from being argued into place after the fact.

Four states, no probabilities

Observed, emerging, contested, not observed. These are qualitative readings against the threshold. No number is invented here, because an invented number would be the most quotable and least true thing on the page.

It stays alive between revisions

The update condition names what would move the state. A signpost that has stayed quiet is information too, and is published rather than hidden.

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WLD-D24-007 · Observed 2025-10-14

not observed

AI Investment or Compute Bubble Bursts

Qualitative signpost review · no probability assigned

Bounded observation

The IMF's October 2025 Global Financial Stability Report found stretched US equity valuation and historically high concentration in mega-cap IT and AI-related firms, while warning that unmet return expectations could trigger a sharp correction. It documented vulnerability rather than a burst: margins remained high and the required joint deterioration in compute utilization, credit and unit economics was not shown.

Trigger threshold

Move to observed only when compute utilization, provider unit economics and credit conditions deteriorate together with material capacity cancellation or provider restructuring.

Counter-indicator

The IMF described a conditional risk, not a realized systemic correction, and reported continued AI-related capital investment and strong incumbent profit margins.

Update criterion

Review provider filings, data-centre utilization, cancellations, spreads and restructuring; escalate only on correlated operating and financing stress, not valuation volatility alone.

Primary routes

  1. https://www.imf.org/-/media/Files/Publications/GFSR/2025/October/English/text.ashx